Hemp and Hemp Derived Products are No Longer Schedule 1, Now What?

February 25, 2019

The hottest topic of the new year circles around the legality of the industrial hemp industry. From cultivation to extraction, and producing a variety of products from oils to topicals, what activities, if any, are completely legal? Am I allowed to conduct business without the worry and concern of violations, penalties or confiscation of product? Unfortunately, the industrial hemp industry is not completely out of the woods. The legal status of hemp and CBD products remains very complex, convoluted and continues to evolve, even as you read this blog.

Industrial Hemp No Longer a Controlled Substance

The Agriculture Improvement Act of 2018 (more commonly known as the “2018 Farm Bill”) de-scheduled industrial hemp and hemp derived products from the list of Schedule I drugs regulated under the Controlled Substance Act (CSA). What does this mean? It means that under federal law, industrial hemp and hemp derived products such as CBD are no longer illegal as a controlled substance. However, the Drug Enforcement Agency is not the only federal regulatory agency that oversees the possession, sale, and use of hemp products.

Hemp and Food Additives

The Food and Drug Administration (FDA) regulates the manufacture food, beverages, cosmetics, and various other products. At this time, all industrial hemp derived CBD oil and CBD products are not an approved food, food ingredients, food additives, or dietary supplement, and therefore cannot be used in any human or animal food products. All products for human or animal consumption are considered illegal food products regardless of the source of the CBD (notwithstanding CBD products from cannabis under a California state license). Not only does the FDA oversee food products, they regulate dietary supplements, medical products and cosmetics. Any claims regarding medical relief or dietary benefits are illegal. But what about the fact that you can buy CBD products on-line, at whole foods, event at 7-eleven? Most, if not all, of the products are illegal under FDA regulations and subject to enforcement.

The FDA has engaged in some enforcement, such as sending notices, and confiscation of small amounts of product. The FDA looks to remind the public of their authority over the industry. The FDA is expected to work towards addressing their position in light of the newly enacted 2018 Farm Bill in the upcoming year. Until then, there are talks of increased FDA enforcement through state and local governments and some localities have already expressed their position and started the process.

Cultivation of Industrial Hemp

Now, what about cultivation? The 2018 Farm bill lays out guidelines for the states to produce their own regulatory plan for the cultivation of industrial hemp and submit this to the United States Department of Agriculture (USDA) for approval. The plan must include certain specifics that are listed in the Farm Bill in order to gain approval. If the state fails to produce their own plan, the cultivation will be subject to the federal plan that will be implemented by the USDA. At this time, the USDA has not provided any information on when that will come into play.

Distribution of Industrial Hemp

Lastly, an important aspect of the 2018 Farm Bill is the language to forbid states and tribes from prohibiting the distribution of such products. But as its well-known in this industry, the legal status is not that simple. What product is protected under the 2018 Farm Bill? Does the protection include hemp legally produced from the 2014 Farm bill? Based on the language, its arguable. Prior to the 2018 Farm Bill, the law clearly protected the distribution of industrial hemp that was legally produced under a state established pilot program, which courts have supported. The language now protects the hemp cultivated under a state program authorized by the USDA after detailed review. As time passes, we will receive further guidance on this subject and the others revolving around industrial hemp.

On the federal level, there is still a risk of being exposed to enforcement and civil penalties. Keep in mind that with all that said, the state of California has their own regulations, or lack thereof, which causes more confusion and potential liability. Information about California’s developing Industrial Hemp Cultivation Program can be found on-line here California Industrial Hemp Program

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